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  1. #1
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    Oil Fundamental Analysis

    Crude oil prices fell in late trading in US Thursday, pressured by the restoration of production Nigeria and Canada and as traders booked profits ahead of the long holiday weekend in the United States . OPEC oil production has increased in June to the highest level in history, a Reuters survey showed, as the Nigerian production partly recovered from militant attacks and Iran and members of the Gulf countries increase its supply.

    The market is also in the middle of a round of profit-taking ahead of the long holiday weekend in USA, and trading liquidity are likely to begin declining since Thursday afternoon. The price of US crude oil futures ended down 3.1 percent lower, or $ 1.55, at $ 48.33 per barrel. These results make US crude fell about 1 percent during June, largely caused by the decision Brexit which makes oil prices plummeted.

    While the price of Brent crude fell 89 cents a barrel, or 1.8 percent, at $ 49.72, after rising in the previous two sessions, economists and analysts said the global oil market would be broadly balanced as a risk in countries such as Venezuela could further disrupt supplies.
    There is potential that the price of crude oil to move down to the recovery sentiment because of the potential strengthening of USD. Prices are expected to penetrate the range of $ 47,80- $ 47.30.

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  3. #2
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    There are basically two ways to analyze
    markets and make trading decisions, the
    fundamental and the technical. Logically
    speaking, fundamental factors and analysis
    always have the upper hand, particularly over a
    longer time period. In the case of crude oil, for
    example, if supply is outstripping demand the
    price is going down, no matter what your charts
    indicate. In the short term, though, as traders
    pay attention to technical factors they can be
    enormously powerful. Right now there is a
    battle going on between the fundamental and
    technical in the WTI market and, unusually, this
    looks like one that technical factors will win.
    Two weeks ago here I predicted higher oil and
    we did climb from around $51 to $54, but the
    likely outcome of this battle has caused me to
    expect another drop from here.

  4. #3
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    Fundamentals as they stand right now,
    however, suggest that oil is going up. At the
    end of November it came as a surprise to many
    people, me included, that despite differences
    so sharp that actual wars were being fought,
    the member countries of OPEC managed to
    come to an agreement to cut production in a
    meaningful way. What was even more
    surprising in some ways was that they managed
    to secure agreement from several large non-
    OPEC producers, most notably Russia, to do
    the same.
    Now you can argue that at some point in the
    future there is a good chance that the
    agreement will break down, or that U.S. shale
    producers will simply up production to
    compensate. The fact is though that both of
    those things are future possibilities, whereas
    the cuts are real and happening. That and the
    expectations of an inflationary environment and
    faster growth that other financial markets are
    pricing in post-election create a fundamental
    background that is supportive of crude prices.

  5. #4
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    Crude oil prices are up slightly early Monday as investors continue to react to the possibility that more refineries in the Texas Gulf Coast area will resume operations this week.

  6. #5
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    Although they are not expected to resume full capacity for some time, even the smallest amount of production will lead to increased demand for crude oil and this should help underpin prices.

  7. #6
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    The U.S. markets are closed on Monday for the Labor Day holiday. The trading that does take place will be on the electronic board. Volume is expected to come in well below average so investors are going to be careful because of the possibility of increased volatility.

  8. #7
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    As of Friday’s close, about a quarter of U.S. refining capacity remained offline. The buying we saw late last week indicates that investors believe there was no major damage to the infrastructure, therefore, it’s just a matter of time before the refineries start producing gasoline.

  9. #8
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    The steep drop in gasoline prices late last week are also another sign that the refineries are preparing to come back on line. U.S. gasoline prices hit a two-year high above $2.00 a gallon on Thursday, but on Friday, as two refineries began to restart, the “crack spread” – the difference between crude oil and gasoline prices – fell nearly 11 percent.

  10. #9
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    Marathon Petroleum Corp’s Galveston Bay Refinery in Texas City, Texas, had raised production to 45 percent of its 459,000 barrel per day capacity, sources told Reuters on Friday, while Citgo Petroleum Corp on Friday said it was beginning to restart its 157,500-barrel-per-day (bpd) refinery in Corpus Christi, Texas

  11. #10
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    In other news, the U.S. Energy Secretary approved up to 4.5 million barrels of crude oil to be released from the Strategic Petroleum Reserve.
    Additionally, the number of oil rigs operating in the U.S. oil fields was unchanged from the prior week, according to oilfield services firm Baker Hughes. The rig count stood at 759, up from 352 a year ago.

  12. #11
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    There are basically two ways to analyze markets and make trading decisions, the fundamental and the technical. Logically speaking, fundamental factors and analysis always have the upper hand, particularly over a longer time period. In the case of crude oil, for example, if supply is outstripping demand the price is going down, no matter what your charts indicate. In the short term, though, as traders pay attention to technical factors they can be enormously powerful.

  13. #12
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    Fundamentals as they stand right now, however, suggest that oil is going up. At the end of November it came as a surprise to many people, me included, that despite differences so sharp that actual wars were being fought, the member countries of OPEC managed to come to an agreement to cut production in a meaningful way. What was even more surprising in some ways was that they managed to secure agreement from several large non-OPEC producers, most notably Russia, to do the same.

  14. #13
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    Now you can argue that at some point in the future there is a good chance that the agreement will break down, or that U.S. shale producers will simply up production to compensate. The fact is though that both of those things are future possibilities, whereas the cuts are real and happening. That and the expectations of an inflationary environment and faster growth that other financial markets are pricing in post-election create a fundamental background that is supportive of crude prices.

  15. #14
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    Oil bounced from its low due to the excessive sell off which took place on the back of Iran news. The cold weather over in the US has also helped the price to move higher, however, it is easing off from its recent high of 32.65. The critical point of $30 is under the spotlight and if we break below this level, we could see the selling pressure start to build up on the energy sector again which will have its impact on the US markets.

  16. #15
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    Crude oil has broken its upward trend line on a 60 minute time frame. The price is touching the lower line of the Bollinger band which reflects that the selling pressure is building up. However, it can bounce back up from this point as in a technical world, the piercing of the lower line of the Bollinger band is considered as a sign of reversal trade.

  17. #16
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    President Obama has announced that he has enough votes to put the seal on Iran deal and this is another matter of concerns for crude traders who have long position. Iran has confirmed today that they will be increasing their supply by nearly over a million in the coming couple of years and this will increase the supply glut even more.

  18. #17
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    Falling oil price is going to increase the deflation problem further and 10 out 34 countries are currently suffering deflationary problems. Yes, it is true that on one hand, the consumers will have more more money in their pocket with extra supply coming on the market and driving the oil price even lower, but than on the flip side, it also increases the odds that the same consumer may actually postpone their spendings so that they bag a better price down the line- hence we have a perfect scenario for deflation.

  19. #18
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    Crude oil price attempted to breach the bearish channel's resistance but it returns to settle below it, which keeps our bearish overview valid until now, supported by stochastic negativity, waiting to head towards 45.40 followed by 44.10 levels that represent our next main targets, reminding you that it is important to hold below 47.50 and 48.37 to achieve the suggested targets.

  20. #19
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    Crude oil price tests the bearish channel's resistance at 47.50 now, which forms the first protecting factor to the recently suggested bearish trend scenario, noticing that stochastic shows overbought signals now to support the expectations of declining in the upcoming sessions.

  21. #20
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    Therefore, we will continue to suggest the bearish trend on the intraday and short term basis unless breaching 47.50 followed by 48.37 levels and holding above them, noting that the waited targets begin at 45.40 and extend to reach 44.10.

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